Cummins Can Come Back

The engine maker's stock stalled due to an earnings warning but we expect it to rev up again.

Late Tuesday, engine maker Cummins lowered its revenue and margin guidance, citing a slowing global economy. The new numbers imply that 2012 earnings will fall short of previous guidance by about 11%. On Wednesday, however, shares fell just 3.4% in response.

That's one sign that Cummins (ticker: CMI) shares have already priced in the slowdown, and then some. Bargain hunters should use the selloff as a buying opportunity.